Capturing revenue currently lost by African countries through illicit financial flows (IFFs) is essential for the continent’s economic security according to a recent meeting of tax officials and experts.
Practical ways to curb IFFs were discussed in some detail at the International Conference on Tax in Africa’s (ICTA’s) flagship event, the African Tax Administration Forum (ATAF).
The 3rd ATAF ICTA in Abuja brought together tax commissioners-general, tax administrators and experts from across the continent.
Participants discussed practical ways to tackle IFFs and taxation of multinational enterprises as well as ways to curb and manage revenue leakages.
Ghanaian taxation expert, Abdallah Ali Nakyea, provided an extensive explanation of IFF typologies, including trade mispricing, over-invoicing of imports or under-invoicing of exports by entities in a country, usually for the purpose of avoiding paying tax or levies in that country.
Nakyea provided statistics indicating that West Africa recorded the highest levels of IFFs, with 38 per cent of the total outflows from African countries between 1970 and 2008.
North Africa recorded the second highest outflows, of 28 per cent followed by Southern Africa with 13 per cent.
East Africa recorded 11 per cent and Central Africa recorded the least with 10 per cent.
Categories: Trade Based Financial crimes News